Ki Young Ju, the CEO of CryptoQuant, has expressed his support for the founders of Samourai Wallet following their indictment by the U.S. Department of Justice for allegedly operating a crypto mixing service that was involved in laundering nearly $100 million.
Ju has defended the role of the crypto mixer in safeguarding user privacy and has contested the charges brought against the founders. In a post on April 25, Ju stated, “The US DOJ has arrested innovators in Bitcoin privacy technology. Privacy is a fundamental value of Bitcoin. Mixing itself is not a criminal act. Even cryptocurrency exchanges utilize mixing to protect user privacy.”
Furthermore, Ju emphasized that the legality of a feature depends on how it is used and the intentions behind it. He likened the situation to the usage of a knife, which can be both legal and illegal. Ju pointed out, “It’s like punishing the inventor of the knife instead of the one who uses it.”
The DoJ has accused the founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, of creating and operating a service that allegedly facilitated over $100 million in transactions related to illicit activities. Since its establishment in 2015, the service is said to have processed around $2 billion in illicit transactions, generating approximately $4.5 million in fees.
Rodriguez has been arrested and is set for arraignment in Pennsylvania, while Hill has been detained in Portugal awaiting extradition to the U.S. The crackdown also involved seizing the Samourai Wallet website hosted in Iceland and issuing a warrant to remove its mobile application from the Google Play Store.
Evidence from tweets and private messages suggests that the founders actively promoted their service to individuals seeking to launder illegal proceeds. The application, which has garnered over 100,000 downloads, was reportedly targeted at users involved in black and grey markets, particularly during the COVID-19 pandemic.
Edward Snowden, a prominent whistleblower and advocate for digital privacy, criticized the actions of the DoJ, stating, “The Department of ‘Justice’ has once again criminalized the developers of an app that restores financial privacy. The solution is to ensure money is private by default. Privacy should never be considered ‘exceptional,’ or else it will become criminal.”
Lyudmyla Kozlovska, a human rights advocate, also weighed in on the issue, highlighting the capabilities of U.S. law enforcement in detecting financial crimes related to cryptocurrencies. Kozlovska emphasized that U.S. law enforcement agencies have the necessary tools to track Bitcoin transactions on the blockchain.
On a different note, the Federal Bureau of Investigation recently cautioned Americans against using unregistered cryptocurrency money-transmitting services that may be targeting smart-contract-driven privacy tools. In a public service announcement on April 25, the FBI urged Americans to only use registered Cryptocurrency Money Services Businesses that adhere to existing Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
The FBI warned that individuals using unlicensed services could face financial disruptions during law enforcement actions, especially if their funds are mixed with illegally obtained money.